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Forbes: Another one you seem to like is Samsung.

Priest: We do like Samsung. Fairly new to that, in terms of we have not owned that in the past. It's debatable. My analyst thinks Samsung's phone is better than Apple's phone, but it doesn't have the apps and it doesn't have the cache. On the other hand, if you look at the very colorful ads for Samsung, I find them to be just marvelous – where the young people are standing in line as placeholders for the parents who are about to buy the Apple phone. I think that's a fabulous ad, and Samsung is taking market share in tablets and is taking serious market share in phones.

Forbes: Daimler, do you still like that?

Priest: No, we parted company with Daimler. We feel the automobile industry, particularly in Europe, a lot of that is China. I think China's slowing. It's a great company, but we parted company with that just believing that final demand was going to slow, particularly in China, for the automobile companies.

Forbes: Vodafone?

Priest: Vodafone is also run by excellent management. We continue to own Vodafone. They basically are a wireless provider with, again, we think very much better management of capital allocation. We think it's probably worth something in the low $30s today if you look at the dividends and the free cash flow generation that will continue to go their way.

Priest: Off the top of my head I forgot. It's low, it's 1% or something like that.

Forbes: So they've had a good run?

Priest: They've had a very good run. And I think most car companies sell at about 3.5 times cash flow, except for the premiere companies like Daimler and BMW and a few of those. But we just think that whole consumer durable market is pretty saturated right now.

Forbes: What other ones turn you on?

Priest: In terms of names, well, Rolls Royce is one of my favorite companies. Now, they don't make cars anymore – they've licensed the name elsewhere. Rolls Royce is basically an engine replacement story. Once an engine is designed onto a plane, you have the replacement rights forever.

Most of the new planes have one of those engines designed by Rolls Royce. It has a fairly low cash yield, but we think the free cash flow today is low also. It should triple over the next three or four years as the R&D comes off and some of the capital spending comes off.

It is truly one of the great, great business models of the world. Every time you're flying in a plane with a Rolls Royce engine, every second that engine is turning over is feeding a computer on the ground. The data that they have on engines is just amazing.

Forbes: Better than GE?

Priest: The GE engines, I'm sure, do the same thing. But it's basically an oligopoly between GE, United Technologies there as well with Pratt & Whitney, and you've got Rolls. We have a very large holding in what I would say are commercial aerospace stocks.

Now, you need the world to grow for that to work. It doesn't have to grow that fast, but the demand for planes and the demand for more fuel efficient planes is quite high. We would much rather play the engine companies than the airplane manufacturers.

Although we do own both Boeing and another European company called Safran, which is an air supplier. But I would say Rolls Royce is just an amazing company, and the stock market doesn't adequately discount that cash flow stream they have.

The market tends to discount near term cash flow streams very well, but far out cash flow streams not well enough. We feel that you have a substantial margin, a multiple expansion possibility in Rolls Royce. We've owned that for a couple of years. It's been a good stock, and we think there's more to come.